Up to 10% allocation in international equity funds can diversify portfolio2 min read . Updated: 19 Jul 2021, 02:14 PM IST
- Sanjiv Bajaj, Joint chairman and managing director, Bajaj Capital answers personal finance queries
NEW DELHI : I am 38 years old and working in a private job. I have been investing in mutual funds for quite some time and my holdings are as below:
1. ₹5,000 per month (p.m.) in Motilal Oswal Long Term Equity Fund
2. ₹5,000 p.m. in Mirae Asset Large Cap Fund
3. ₹1,000 p.m. in Kotak Emerging Equity Fund
4. ₹1,000 p.m. in ICICI Prudential Blue-chip Fund
5. ₹1,000 p.m. in SBI Magnum Midcap Fund
6. One time investment of ₹25,000 in Quant Absolute Fund
7. One time investment of ₹25,000 in Franklin India Feeder-US Opportunities Fund
Please give your views on my current portfolio. My risk profile is 'Aggressive Long Term' for next 10-15 years. If I want ₹1 crore corpus in the next 20 years, how should I proceed? I can save another ₹10,000 p.m.
We are assuming you have already made the provisions for your emergency fund and are hence considering your existing monthly investment and additional capital totalling ₹23,000, if keep getting invested with 10% CAGR returns over the next 15 years, it will help you to attain your desired goal of accumulating ₹1 crore corpus. Your existing portfolio is a mix of ELSS, large-cap, mid-cap, international equity and aggressive hybrid funds. You may consider rebalancing your existing portfolio. Entire monthly allocation can be spread across equity and hybrid oriented funds, which can be further divided in 90:10 ratio, respectively. Mirae Asset Tax Saver Fund, Canara Robeco Flexi Cap, HDFC Growth Opportunities Fund, Kotak Emerging Equity Fund, IIFL Focused Equity Fund, IDFC Sterling Value Fund & Kotak Small Cap in Equity category while ICICI Prudential Balanced Advantage Fund & Aditya Birla Sun Life Balanced Advantage Fund in Hybrid category can be considered. For lump sum portfolio, you may remain invested with both the existing funds. This way your portfolio will be diversified across asset class, category, scheme, geography and asset management company. It is also advisable to keep reviewing your portfolio at least once in a year.
Please suggest mutual fund with investment in international business and secondly shall one invest in them.
To diversify overall mutual fund portfolio, one can have up to 10% allocation in international equity funds. It will not only give you a geographical diversification but also offer opportunity for investment in sectors or companies which are not available in India such as Facebook, Apple, and Microsoft. There are multiple international funds available, however you may choose those funds which have a sound track record such as Franklin India Feeder–US Opportunities Fund, ICICI Pru US Blue-chip Equity Fund, and Motilal Oswal Nasdaq 100 FOF.
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